The big news at the G20 was obviously about the IMF, with the Americans pulling out an impressive deal on funding (compare with our predictions…). But the money is not the biggest achivement. The big move was in terms of who will run the IMF in the near future – as I explain my NYT.com column this morning, there is an implicit and almost immediate shift towards emerging markets.
President Obama had just the right tone yesterday. Admittedly, he was helped by the fact that we no longer have anything to be arrogant about, but still the way he reached out to other countries – while also pointing out that they made big mistakes and are currently in trouble – conveyed exactly the right message. The US will do much better if it lets emerging markets and developing countries have a serious and permanent place at the big table.
Among other things, this will fundamentally change the way the IMF operates. As a symbol and for its potential impact on the international economy moving forward, yesterday’s final loss of European control over the IMF really matters.
Originally published at the Baseline Scenario and reproduced here with the author’s permission.
4 Responses to “Obama Wins At G20: Europeans Lose Control of IMF”
Large and heavy spins in this statement, moreover contradictory in form and substanceThe former IMF chief economist now teaching at MIT Sloan aknowledged the fact that the USA have always instrumentaly used the IMF.The successive European IMF heads seemed to have never been able to keep their functions until the maturity of their contracts.The actual IMF director S Kahn made as a preliminary pledge when entering his function to relinquish the post to a representative of the new growing economies.When looking at the Asian crisis curator, eyes are focusing on T Geithner as an instrumental arm of the IMF driven policy.Camdesus a former IMF head always said when in function that it requires a high sense of humour.I have read this triptic with the same cheering spirit, and look forward to read the writer statement of opinion on the World bank fate.
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Mr Johnson has remarkably and consistently biased views on a wide range of topics. As an anglo-saxon he is of course hurting as he sees the value of both his real assets as well as his currency(ies) getting structurally eroded. His governments’ debts are rising like never before. He has yet to face the moment of truth and reconcile the past arrogance of “blond people with blue eyes” as Pres. Lula stated recently, with current reality. How else could a “loss” of the IMF by Europeans in favor of emerging markets be interpreted as a victory for Obama (!), who, alone, has gotten himself into having to beg for Chinese (read: emerging market) mercy and generosity.At last Mr. Johnson – wake up (or resign). Being attached to MIT Sloan you are under even greater responsibility to present balanced views because students trust your basic objectivity. We understand that both your old as well as new home countries are bankrupt and this hurts, but your current heavily biased positioning is not doing us all any favors.
Very insightful observation. I agree completely. Thanks for pointing this out.